Ibrahim Al-Mehairi, the head of Islamic banking services at Mashreq Bank, announced that the bank is actively pursuing an expansion strategy in the Islamic banking sector, committing to sustainable financing of AED 110 billion by 2030. This initiative supports the transition toward a more sustainable economy and reinforces the UAE’s position as a global center for Islamic finance.
In a recent interview with a local publication, Al-Mehairi explained that Mashreq Bank is following a defined strategy that aligns with the UAE’s national agenda, aimed at establishing the country as a leading hub for Islamic finance and halal industries. He noted that Islamic deposits have surged by 133% compared to 2020, reflecting a compound annual growth rate of 18% over the past five years.
He highlighted that this vision encompasses increasing the market share of Islamic financing within Islamic banking assets, sukuk, and Sharia-compliant exchange-traded funds, as well as taking the lead in exporting halal products and promoting halal tourism. Additionally, the bank is committed to supporting Islamic charitable endeavors and sustainable businesses.
Regarding opportunities for expansion into new markets, Al-Mehairi stated, “At Mashreq Bank, we are assessing opportunities for growth in Islamic banking by meticulously studying high-potential markets, with a particular focus on Saudi Arabia, Pakistan, and Egypt, where the bank has a growing presence and leadership in providing Islamic solutions, especially in the Pakistani market.”
Below is an excerpt from the interview:
What are the key factors that contributed to Mashreq Bank’s strong performance in 2025 within Islamic banking and Sharia-compliant investments?
The Islamic division of Mashreq Bank is a licensed entity under the supervision of the Central Bank of the UAE. In 2025, it experienced robust performance driven by strategic factors that cemented its position in the Islamic banking sector, reporting an impressive 144% growth in total assets by the end of 2025, supported by a 20% compound annual growth rate over the past five years.
How has the asset diversification strategy, including Sharia-compliant solutions, supported stable returns and growth amid market volatility?
Mashreq Bank has adopted a comprehensive strategic approach, starting with in-depth market research to understand sector trends and evaluate risk levels. This enables informed decision-making in capital allocation to the most suitable opportunities, considering current market conditions.
In this context, the bank has maintained a balanced approach in building a strong liability base that efficiently finances its asset portfolio, supporting stability and sustainable growth. This is reflected in a 133% increase in Islamic deposits since 2020, coupled with an 18% annual growth rate over the previous five years.
The bank has also focused on global expansion through a linear model based on digital capabilities, reducing the need for substantial investments in traditional infrastructure. The successful launch of a fully digital branchless bank in Pakistan exemplifies this direction. Furthermore, the bank is committed to its international expansion goals, seeking to be among the leading global banks by leveraging advanced digital capabilities and external partnerships to deliver an integrated and seamless banking experience, considered best in class.
Which Sharia-compliant sectors do you believe will drive growth in the coming years through 2026?
Mashreq Bank follows a specific strategy for the near future, in line with the UAE’s national agenda aimed at establishing the country as a global center for Islamic finance and halal industries.
This vision includes enhancing the market share of Islamic financing within Islamic banking assets, sukuk, and Sharia-compliant exchange-traded funds, alongside leading efforts to export and re-export halal products, promoting halal tourism, as well as supporting Islamic charitable work and sustainable business practices.
In this framework, Mashreq Islamic is solidifying its standing by expanding its presence in the Islamic asset sector and trading activities, benefiting from the ongoing double-digit growth in the Islamic market, with the aim of achieving similar growth rates in the near future.
Supporting and developing the halal industry and trade ecosystem is a key focus of the bank’s strategy, along with expanding into the sukuk market, which is seen as one of the primary growth drivers. This is aligned with Mashreq’s commitment to provide sustainable financing of AED 110 billion by 2030, where Islamic financing is expected to play a crucial role in achieving this target.
How does the bank evaluate new market expansion opportunities for Islamic banking and what criteria do you rely on to balance growth, Sharia compliance, and risk management?
At Mashreq Bank, we evaluate opportunities for expansion in Islamic banking markets through precise studies of high-potential markets, focusing particularly on Saudi Arabia, Pakistan, and Egypt, where the bank enjoys a growing presence and leadership in offering Islamic solutions, particularly in the Pakistani market.
This expansion is guided by clear criteria that balance sustainable growth with strict adherence to Sharia regulations and efficient risk management. Additionally, Mashreq leverages its unique position as the sole US dollar clearing bank in the Middle East to identify international growth opportunities while maintaining a cautious and disciplined approach to entering new markets.
What role do alternative Sharia-compliant investments play in enhancing long-term returns and supporting innovation in Islamic banking?
We at Mashreq Islamic believe that alternative Sharia-compliant investments are essential for boosting long-term returns and driving innovation within Islamic banking. This includes expanding into tools such as sukuk, long-term agency deposits, and partial sukuk, while also taking advantage of modern technologies like stablecoins, open financing, and banking services.
What makes the UAE an incubator for developing digital Islamic banking solutions compared to other hubs?
The UAE features a comprehensive regulatory and legislative framework that supports the growth and development of the banking sector, in alignment with a clear national vision overseen by the Cabinet and monitored by the Central Bank of the UAE to ensure banks meet set goals by 2031. This responsibility is not solely on the central bank; various ministries and governmental entities play roles in integrating Islamic finance objectives into the banking system, enhancing the realization of the state’s vision and strategic goals.
How do sustainability principles, governance, and Sharia compliance influence investment decisions and the bank’s appeal to investors?
Mashreq Islamic adheres to a comprehensive governance and regulatory framework overseen by the supervisory authorities in the UAE, ensuring that all offerings for clients meet the highest standards of Sharia and regulatory compliance.
This framework is based on clear guidelines led by the Central Bank of the UAE’s instructions related to Islamic banking, alongside oversight from a higher Sharia authority that ensures full compliance with the established Sharia rules and guidelines at the national level.
At the bank level, an internal Sharia supervisory board plays a crucial role in reviewing and approving product details, documentation, marketing materials, operational procedures, and systems to ensure full compliance with Islamic principles.
Additionally, an internal Sharia compliance team monitors daily operations and reports to the Sharia supervisory board, ensuring continuous and effective compliance at all operational levels. The business teams are also committed to adhering to this comprehensive framework and obtaining all necessary approvals before introducing any new or revised product to the market, following the established approval sequence prior to launch.
To promote integrity and transparency, Islamic products are exclusively financed from Sharia-compliant sources and the funds are utilized solely for Islamic assets, with full separation of accounting and records to prevent mixing with traditional activities, subjected to stringent and independent oversight. This framework is complemented by internal audit teams and Sharia field visits that review compliance with guidelines and identify any potential issues or deviations.
How do you see the role of technology in supporting financial inclusion and expanding the user base of Islamic banking products in the future?
Mashreq’s management is focused on significant investment in developing advanced digital banking capabilities, recognized among the best in class, enabling a comprehensive suite of banking products and services through an inclusive approach. This drive is not only operational but fundamentally involves assessing client experience and understanding their needs to meet them with maximum efficiency and ease.
In this regard, Mashreq has successfully digitized most of its retail banking products and is now working to complete the digitization of corporate banking products, empowering clients to conduct transactions with ease and gradually moving away from traditional banking models.
It is expected that artificial intelligence will play a pivotal role in daily banking operations in the near future, contributing to the improvement of service quality and enhancing the ability to offer more personalized and efficient banking solutions, thereby supporting financial inclusion and expanding the user base for Islamic banking products and services.
Amid the rapid digital transformation, how does the bank balance the adoption of technological innovation, such as blockchain and AI, with Sharia governance requirements, risk management, and regulatory oversight?
At Mashreq Islamic, we ensure that all Islamic banking products and services, including digital experiences, are subjected to the same review and approval framework that governs conventional products through a clear approval sequence and Sharia regulatory oversight.
Just as Islamic products undergo detailed evaluation and certification stages, digital solutions also navigate the same levels of governance and institutional regulation. Overall, Islamic banking services rely on documenting transactions, validating procedural integrity, and ensuring compliance with Sharia acceptance at each stage, principles that are carefully integrated into the developed digital journeys.
I am confident that Mashreq Islamic achieves the ideal balance between technological innovation and Sharia compliance, and I believe it stands out as one of the leading digital Islamic banks, providing all Islamic banking solutions and services in a fully integrated manner, with an emphasis on user-friendliness, strict governance, and full compliance with Sharia guidelines, risk management requirements, and regulatory oversight.